Editor | 9 April 2020
How coronavirus is affecting small online retailers

How coronavirus is affecting small online retailers

The coronavirus outbreak has had a huge impact on lives, jobs and businesses. Although many online retailers can continue trading through the disruption, they are by no means immune to the chaos.

Small online shops face a raft of new challenges and barriers to doing business, many of which are causing serious issues for companies.

In this blog post, we identify some of the biggest problems facing small online sellers during the coronavirus crisis.

Demand changes

Almost overnight, huge demand shifts reshaped the eCommerce economy. Suddenly, medical supplies and household basics likes hand sanitiser, anti-viral wipes and toilet paper were sold out in supermarkets and online stores across the country.

This is just one example of a particularly extreme demand shift caused by the outbreak, but there are many others - some positive and others highly damaging to companies. While online demand for books, puzzles and indoor gym equipment has skyrocketed (particularly as high street retailers have shut their doors), the sale of other products like travel accessories and outdoor supplies has dried up.

Stuttering incomes and growing uncertainty are also having a broader impact on demand. Many people have been left worse off as a result of the coronavirus crisis and this is also depressing demand, particularly for big-ticket purchases.

Supply issues

As well as demand issues, many online sellers are also running into problems with supply. Coronavirus is a global phenomenon and the outbreak has disrupted many of our traditional supply routes. Some retailers may have been having difficulties locating enough stock for several months, particularly if the bulk of their supply comes from China.

Many small online retailers may be worst hit by these supply issues, because they are more likely to rely on wholesalers and may find it harder to locate alternative suppliers.

Fulfilment problems

Coronavirus is also causing problems on the delivery side of things. With shops closed the demand for deliveries has skyrocketed. At the same time, many fulfilment warehouses are running way under capacity because of social distancing requirements and because many staff have had to self isolate.

Amazon’s warehouses are currently running over-capacity, so the online seller is restricting the products that it will fulfil on the Fulfilled by Amazon (FBA) scheme. This means that the platform is temporarily prioritising household staples, medical supplies and other high-demand products going into their fulfilment centres.

Sellers that don’t sell these kinds of products can still use the Amazon platform to sell, but they need to find alternative arrangements for delivery like the Fulfilled by Merchant (FBM) scheme. Other fulfilment companies are operating as normal, but delivery may be slower than usual.

Are you having difficulties managing your online shop? At Cloud Accountant, we are committed to helping our customers through this difficult period with our financial expertise in the online retail sector. Speak to a member of the team today. Call: 0808 501 7052 or email team@cloudaccountant.co.uk today.